According to the documentation, it sounds like that is working as expected. Note I have never used this, so just relaying what the documentation says:

"Currently replication works only with InnoDB storage engine. Any writes to tables of other types, including system (mysql.*) tables, are not replicated. However, DDL statements are replicated in statement level, and changes to mysql.* tables will get replicated that way. So, you can safely issue: CREATE USER..., but issuing: INSERT INTO mysql.user..., will not be replicated."